CRA Pricing Estimation & Business Profitability Explored
We share the 6 laws of modern estimating because with all the changes taking place in the collision repair industry being an estimator is much harder than it’s ever been.
When referencing the collision repair industry, it has become commonplace to describe it as “changing” or “evolving.” More so than many other industries, collision repairers have had to keep up with a host of new technology. In vehicles themselves, they’ve had to adapt to increasing amounts of ADAS and the arrival of hybrids and EVs. From a shop operations perspective—from sorting through a bevy of shop management system options and other digital tools to the introduction of artificial intelligence in the insurance process—the COVID-19 pandemic only accelerated many of these trends.
Every spot in the shop, from technician to detailer to service advisor, has experienced a change in workflow and job description. But nobody may have seen a bigger and more difficult shift in their day-to-day job than estimator, says Teddy Haynes, an auto and truck instructor for Vale National Training Center, which offers classes for collision repairers, insurers, and independent adjusters.
“It’s 100 percent harder than it’s ever been to be an estimator,” he says.
From researching to writing estimates to dealing with increasingly absent field adjusters all while the admin-to-tech ratio shrinks, keeping up and thriving as an estimator is becoming a tougher and tougher task—and it becomes easier and easier to miss steps in the process.
So what does every successful modern estimator need to do to succeed? With the help of industry experts and top estimators, FenderBender has compiled the six laws of modern estimating.
Law 1: You have to do your research.
It may sound obvious, but the first and most important requirement to being a successful estimator in 2021 is research. Many estimators, especially older ones, have struggled with such a shift.
“Back 15 or 20 years ago, things weren’t really changing. Yes, new cars were being made. But nowadays manufacturers are changing procedures every day and EVs and hybrids are hard to get information on,” Haynes says, “and some people are still struggling to adapt.”
And that means searching everywhere.
Haynes will go to traditional outlets like I-CAR, or if a shop is certified, repair procedures that the OEM releases. But it also means looking on YouTube and Google for information on repair procedures, parts, and processes of similar jobs. If information is still missing, which Haynes says happens frequently, he’ll call other friends in the industry who might know. Estimators need to be “resourceful,” Haynes says. That might mean hitting five dead ends before finally finding the information. Estimators need to be ready for that challenge.
Josh Kuehn, a coach for Collision Advice who specializes in estimating, has seen a shift as well. Estimators need to be more aware of OEM procedures and the constant updates to position statements. That also means understanding developing ADAS technology and all the research requirements wrapped up in them.
That’s why Kuehn recommends always checking the OEM site first. It’s the most trustworthy and most likely to have the information the estimator needs. Most manufacturers don’t require the shop to be certified to access their site, which is another common misperception, Kuehn says. Take advantage of 24-hour or other short-term subscription options. The time the estimator will save scrounging the internet for the information makes up for the cost of the subscription.
Riane Twining, body shop manager at Preferred Collision Center in Muskegon, Mich., will even cross-reference information from multiple sources before doing a repair. She checks the OEM website, but also looks at I-CAR and uses Google. At least half of the work in the shop comes from DRPs.
Another gold mine of information that Kuehn has uncovered is the various industry estimating systems.
“For a lot of people, whether they use one estimating system or three, there is a lot of information in the estimating guide that they’re not aware of,” Kuehn says.
In each estimating guide, there is a list of all non-included operations, Kuehn says, which are often missed by estimators because of the “daily grind” of being an estimator.
Including those will allow the business to be more profitable, a must in the current state of the industry, which is seeing profit margins shrink as parts prices go up and labor rates remain stagnant.
Kuehn also notes that those non-included operations lists might not list everything that can be deemed “non-included.” Kuehn’s rule of thumb is that if it is not listed as “included”, then everything else is non-included, regardless of whether or not they are listed as a “non-included” operation.
The estimating guides will include other small nuggets of information, like prepping raw plastic parts for bumper covers, rocker moldings and trunk covers.
Law 2: Documentation is no joke.
One of the byproducts of COVID-19 was an accelerated move to remote adjusting from insurance companies. While it was already trending in that direction, the pandemic quickly forced estimators, both from non-DRP and DRP shops, to take on many of the responsibilities previously held by field adjusters, ranging from administrative tasks to taking photos and documenting and submitting supplements. On top of that, working with adjusters became harder as they couldn’t see the vehicle in person and there wasn’t a chance to develop a personal connection with the adjuster in the same way as they could before.
Adam Mette, production manager at Probst Auto Body in Dieterich, Ill., and 2019 FenderBender Award winner, has seen his role shift dramatically in the seven years he’s been in the industry, mostly as adjusters have been less present and, as Mette puts it, less knowledgeable.
Despite taking on absolutely zero DRP work, Mette says, “we are basically doing their job for them.”
As a result, a bigger priority has been placed on documentation and making sure the estimating process is organized. Not only do they need to fulfill the role of an adjuster, they need to make it informative enough to convince an adjuster who may have little knowledge of the vehicle, Mette says.
One area that has been affected is photos. When taking good photos, approval can become relatively easy. Mette takes photos of everything, and focuses on the quality of each. The photo needs to clearly show the issue in question. It can’t be a task that estimators simply check off on their long checklists. Mette estimates with good photos he gets approval 90 percent of the time.
Haynes stresses that the photo taking process is pivotal. All four corners should be photographed. They need to be clear and it should essentially replace line notes.
“It should get to the point where you’re taking photos and wouldn’t even need to explain anything. Photos alone should explain what’s going on,” Haynes says.
However, don’t replace line notes with photos. Having photos is important, but having a thorough description of the issue in the line notes of the estimate is one thing Kuehn emphasizes in his teaching.
“Your catch phrase should be, ‘make it hard for them to say no and easy for them to say yes,’” Kuehn says. “Line notes are the best way to do that.”
Kuehn says he sends back many of his students’ line notes because they don’t make sense and aren’t descriptive enough. If done right, line notes will save time and reduce the stress on estimators. Just as an estimate’s photos should be able to replace line notes, detailed line notes should be as descriptive as pictures. Include what particular parts are damaged and what needs repair or a replacement. Don’t ever give the insurance company a reason to question why something is on the estimate. Detailed line notes give estimators the ability to justify their claims, Keuhn says, so use them to their full potential.
Law 3: Embrace technology, new and old
To Kuehn, one of the biggest assets that not enough shops are using is the Blueprint Optimization Tool (BOT), created by the Society for Collision Repair Specialists (SCRS). When asked about the three most important tools/resources that a modern estimator needs, Kuehn said BOT software was second, behind OEM repair procedures.
“To me, it’s something that can be used by every shop, even if they are DRP-centric. It saves tons of time and automates a manual process that eliminates human error,” Kuehn says.
The BOT software will immediately identify labor operation, line items, non-included operations and other aspects of an estimate that can often be overlooked.
However, embracing technology doesn’t just mean trying out new products. There is plenty of older technology that isn’t being used enough, Kuehn says.
Top amongst those are P-Pages. They’ve been around as long as estimating systems have, but there are people who don’t know how to use them, Kuehn says. Commonly, shops will just use one of the three major systems—Mitchell, CCC or AutoText. Shops should actually be utilizing all three, Kuehn says, as different insurance companies use different systems. If the insurance company’s preferred system doesn’t match with the shop’s, then it’s the shop’s responsibility to match the paperwork of the other systems. The process of manually copying an estimate from an insurer into the shop’s own estimating system is known as rekeying and can be a large time consumer for estimators. Using all three of the major systems will help mitigate that process by ensuring the estimators know the correct language, which can differ slightly between systems. Rekeying should be avoided whenever possible and should only be acceptable in a scenario in which a customer has already gotten an estimate from another shop.
Additionally, if the shop doesn’t know the other system, it might not know the labor formulas or operations it could be taking advantage of.
Another piece of equipment that isn’t used enough is mobile estimating carts, Kuehn says. Using a mobile cart, the estimator can have three screens up, one looking at the OEM repair procedures, another looking at a parts breakdown and a third in the estimating system. It is one of the easiest resources to help a shop achieve 100 percent disassembly and avoid supplements, but not enough people are using them, Kuehn says.
“Try different technology and make it work for you,” Kuehn says. “It is very helpful.”
Law 4: Be prepared for constant change
Twining, the collision production manager at Preferred Collision, has worked in the auto body industry for nearly 13 years and took on estimating in 2018. From observing estimators in her earlier years, to just within the four years she has been doing estimates, the job has changed drastically. Understanding ADAS and the processes that make up the systems has been amongst the tougher duties to handle. Twining frequently goes through OEM repair procedures and the news position statements to make sure she is staying on top of the latest vehicle technology.
It goes hand-in-hand with research, but having a pulse on what is changing in OEM procedures is vital, Haynes says. Estimators should be subscribed to industry news outlets and specific manufacturer releases to stay on top of those OEM updates.
The constant change can be difficult. It has been for Twining, and Mette agrees. The most important trait an estimator needs nowadays is patience, Mette says. Reading repair procedures and staying up to date takes up a large chunk of his time. That patience needs to extend to other forms of change. Mette has worked with plenty of different field adjusters and their varying degrees of involvement and knowledge. Plenty of adjusters Mette has worked with recently barely know anything about vehicles. That can make it extra frustrating when they push back and question the estimate that he writes.
“Adjusters are just given guidelines and that’s all they know. A majority of them have no idea. Explain why you’re doing everything for them,” Mette says.
All of that extra effort means estimators hardly ever have a moment to breathe during the day. Keuhn has seen stress amongst estimators increase during his time as a coach. He preaches the idea of a work-life balance and encourages estimators to “just go home” at the end of the day. Of course the work needs to be done, but overworking is going to lead to more mistakes and more work later on. Because of this, he recommends a 1:1 admin-to-tech ratio. Simply hiring more estimators will lower the stress and increase efficiency, he says.
Still, regardless of the amount of estimators the shop has, dealing with constant change is just part of the job description now, Haynes says. And it’s not slowing down anytime soon.
“We’re at the beginning of things evolving,” Haynes says. “There will be changes in paint, vehicle platforms, motors. Everything. So it’s absolutely necessary that you can change and are watching what’s happening.”
Law 5: Achieve 100 percent disassembly from the beginning
Among the top goals for a shop is to achieve 100 percent disassembly. Doing so allows an estimator to complete a full estimate and understand every issue that needs to be addressed. However, achieving 100 percent disassembly has too often become more about checking a box than the actual importance of why it is done, Keuhn says.
“What I see a lot of shops unsuccessfully doing is, rather than concentrating on why something needs to be removed, they are only focused on reaching 100 percent disassembly,” he says. “A mindset shift is needed.”
It’s not about reaching some magical figure, Keuhn explains. It’s about removing parts to restore corrosion or to access the structure of a vehicle or another of the many reasons a car goes to disassembly in the first place. The main mental motivator shouldn’t be avoiding supplements. It should be about fixing the car correctly. When that is the main motivator, suddenly supplements become less common and 100 percent disassembly is achieved from the beginning more often, Keuhn says.
In practice, that means estimators need to be involved in the process. Keuhn likes to view the estimators as coaches who help guide the disassembly team through the process. Ask leading questions of technicians so you’re working with them rather than forcing them to do something. In the same vein, that collaboration needs to start before disassembly starts and throughout the process, he says.
It also means having disassembly clearly organized. Keuhn recommends keeping the disassembly stall tidy, with replacement parts all in one area. Keep a running list of hardware, clips, screws and fasteners and make use of mobile estimating carts. With the estimator providing an extra set of eyes and a different perspective than a technician, that should help achieve 100 percent disassembly, Keuhn says.
“It’s something a lot of shops struggle with,” Keuhn says.
Law 6: Remember who you work for
One of the biggest problems Haynes sees from the estimators is that they confuse their priorities. The No. 1 priority should always be to return the vehicle safely and in as close to pre-collision condition as possible, Haynes says. It is not to be best friends with the insurance companies and save them the most money. It is not to avoid ruffling feathers. If an insurance company isn’t covering a repair that fits with your shop’s number one priority, an estimator has to be ready to negotiate and not back down.
“Never lose focus for who employed you to do the work,” Haynes says. “Many estimators think they are working for the insurance company. No, you work for the customer. Don’t forget who the customer is.”
Haynes sees too many estimators who won’t challenge insurance companies out of fear. Fear that it won’t get approved. Fear that they are souring a relationship with the insurer. Fear that the customer will look badly on the shop if it is at odds with the insurance company. And while Haynes certainly doesn’t advocate for conflict, it has become a necessary part of the collision repair process.
“You’re the expert, remember that. And you’re liable,” Haynes says. “If there’s an incident after the repair, the insurance companies will step away and it will be on you.”
“Stand your ground. They’re going to try to push you around,” says Mette. “Have the customer involved the entire time so they can understand the insurance doesn’t want to pay.”
Anytime a shop is getting questions or pushback from insurance companies, Kuehn recommends considering four negotiation questions: Is it required? Is it an included operation? Is there a predetermined time frame this needs to be completed in? And if not, is it worth it?
Those four questions guide Kuehn’s teaching of negotiation. If it is required, it should be pursued. If it is an included operation but the insurance company is not accepting it, it should be pursued. If the shop feels the fight is worth it, it should be pursued.
There are three other things to keep in mind, Kuehn says. First, set yourself up well for these conversations through your estimates. The more explaining you can do in the line notes with the addition of quality photos and procedures, the less questions the insurance companies will have. Second, don’t fall for the “you’re the only one that charges for…”
“There’s an interesting thing that I’ve found as I’ve been teaching for the last three years,” Kuehn says. “For the thousands and thousands of estimators and shops I’ve talked to, every single one has been told by an insurance company that they are ‘the only one that charges for something.’ The ‘only ones’ club is pretty crowded.”
For that reason, come with information that supports you’re not the only one. Kuehn recommends the “Who Pays for What?” survey, which clearly outlines what percentage of shops charge for what operations. That should quickly debunk the “only ones” argument.
Third, remember that giving a concession as part of a negotiation is part of the job. And that just because you gave that concession once doesn’t mean that’s the way it has to be every time moving forward. Let the insurance company know that it was the shop’s choice not to charge for that this time around. That is not the expectation moving forward.
Article Credit to Fender Bender.
Do you agree with the sentiment that price estimation has become much harder than it used to be? What do you do in your shop to assist the estimators, ensuring correct and accurate estimations? Let us know in the comments below. Also, if you found our content informative, do like it and share it with your friends.
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